Date: 2024-03-07Category: Public Private Partnership in IndiaState: Union GovernmentCountry: India
Hiring Transaction Advisor for the proposal of Enhance energy efficiency of water supply and wastewater systems for Greater Visakhapatnam Municipal Corporation (GVMC).
**Executive Summary**
This document is an office memorandum forwarding the Record of Discussion from the 19th Meeting of the Approval Committee held on March 7th, 2024. The meeting addressed proposals from Greater Visakhapatnam Smart City Corporation Limited (GVSCCL) to hire Transaction Advisors under the IIPDF Scheme for water supply and management projects. The document outlines the committee's decisions regarding two proposed projects.
**Key Points / Main Content**
* **General Information**
* The 19th Approval Committee meeting was chaired by the Joint Secretary, ISD Division, Department of Economic Affairs (DEA).
* The meeting was held to consider proposals by GVSCCL for water supply and management system projects in Visakhapatnam.
* **Proposal 1: Development of Non-Revenue Water (NRW) Monitoring and Management**
* Project aims to monitor NRW and enhance water supply efficiency.
* Envisages a PPP model for continuous monitoring and NRW reduction.
* Estimated TA costs: Rs. 2,50,16,000/-
* IIPDF contribution sought: 100%
* Current status: RFP for engaging TA is yet to be floated.
* Decision: Consideration of the proposal was deferred due to lack of clarity on the project and private partner roles. The PSA was requested to clarify project contours and PPP mode scope.
* **Proposal 2: Enhance Energy Efficiency of Water Supply and Wastewater Systems for GVMC**
* Project aims to enhance energy efficiency of water supply and wastewater systems.
* Estimated TA costs: Rs. 2,24,20,000/-
* IIPDF contribution sought: 100%
* Current status: RFP for engaging TA is yet to be floated.
* Decision: The Approval Committee decided not to accept the proposal after deliberations on the ESCO model and the PSA's approach.
**Impact Analysis**
**Greater Visakhapatnam Smart City Corporation Limited (GVSCCL)**
* **Impact**:
* Their proposals for hiring Transaction Advisors under the IIPDF Scheme for the mentioned projects were either deferred or rejected.
* GVSCCL needs to address the concerns raised by the Approval Committee to potentially re-submit the proposals.
* **Action Required**:
* Clarify project contours and PPP mode scope for the NRW monitoring proposal.
* Re-evaluate their approach to enhancing energy efficiency, considering the ESCO model as an alternative to the proposed PPP model.
**PSA (Project Structuring Agency)**
* **Impact**:
* Needs to provide clearer project details and contours to GVSCCL.
* **Action Required**:
* Collaborate with GVSCCL to come up with clear project contours and scopes on PPP mode.
**Department of Economic Affairs, Ministry of Finance**
* **Impact**:
* Need to review updated proposal from GVSCCL once the required information is submitted.
* **Action Required**:
* Re-assess the projects based on revised proposals and clarity on PPP models.
Key Entities Referenced
IIPDF Scheme: The India Infrastructure Project Development Fund Scheme, under which Greater Visakhapatnam Smart City Corporation Limited is seeking support
Approval Committee: Committee responsible for considering proposals under the IIPDF Scheme.
Greater Visakhapatnam Smart City Corporation Limited (GVSCCL): Entity submitting proposals for water and wastewater system projects in Visakhapatnam under the IIPDF Scheme.
Visakhapatnam, Andhra Pradesh: City in Andhra Pradesh where the proposed projects are to be implemented.
Department of Economic Affairs: Department within the Ministry of Finance involved in the approval process.
F. No. /9/2024-PIU
Government of India
Ministry of Finance
Department of Eeonomic Affairs
Infrastructure Finance Sccretariat
Infrastructure Support & Development Division
Private Investment Unit (PIU)
5Floor. Jawahar Vyapar Bhawan.
Tolstoy Marg. New Delhi
Dated 1s March 2024
Offiee Memorandum
Record of Discussion of the 19" Meeting of the Approval Committce to consider the
proposals of Greater Visakhapatnam Smart City Corporation Limited (GVSCCL),
Government of Andhra Pradesh for hirine Transaction Advisors under IIPDF Scheme.
The undersigned is directed to forward Record of Discussion of the 19th Mecting of the
Approval Committee to consider the proposals ol Grcater Visakhapatnam Smart City Corporation
Limited (GVSCCL), Government of Andhra Pradesh for undertaking water supply and
management system projects in Visakhapatnam on PPP mode. held on 7h March 2024 for
inlormalion and nccessary action.
2. This issue with thc approval of the Competent Authority.
(Anmol Waraich)
Assistant Dircctor
To
1.
Shri Partha Sarathi Reddy. Adviser, NITT Aayog
Sri CM Saikanth Varma. IAS Commissioner, GVMC and MD&CEO, GVSCCL.
Sri G. Ananda Rao, Manager. GVSCCL.
Sr. PPS to JS (ISID)
1V
Copy for information:
The Chicr Sccretary, Andhra PradeshRecord of Diseussion of the 19 Mecting of the Approval Committee to consider the
proposals of Greater Visakhapatnam Smart City Corporation Limited (GVSCCL),
(Government of Andhra Pradesh for hiring Transaction Advisors under IIPDF Seheme.
The 19" Approval Committee (AC) Meting chaircd by the Joint Sccretary, ISID Division,
Department of Fconomic Aflairs (1DA) was held on 7h March 2024 at 1530 hours to consider the
proposals submitted by GVSCCL, Government of Andhra Pradesh under the IIPDE Scheme. lList
of participants (atlendces) is placed at Annexure- 1.
On behalf of the Chair, Joint Dircetor (PlU) welcomed the attendecs to the 19 Mccting of
the Approval Committee and inlormed that two projeet proposals were rcceived írom Grcater
Visakhapatnam Smart City Corporatin Iimited (GvSCCL), Governnent of Andhra Pradesh, for
water sector. IFurther, Joint Diretor (PIU) informed that the proposal has been duly circulatcd to
all members of the Appraisal Committee (AC) and with the permission of the Chair, GvSCCI.
was invited to make a prescntation on the proposal.
Development of Non-Revenue WVater (NRW) monitoring and management in water
supply System in Visakhapatnam.
3 The proposal was lor monitoring Non-revenue waler and management of water supply
system in Visakhapatnam. GVSCCI jointly with GVMC has identificd the timely necd to
enhancc the cliciency the water supply systems by reducing
NRW, and intends on attracting private sector participation through a structured transaction
process to deploy a system for continuous monitoring and systemie reduction of NRW. A brie
overview oft he projcct is provided below:
Project Name Development of Non-Revenue Water (NRW) monitoring and
management in water supply system in Visakhapatnam
l'urpose of Assistancc PPP Trunsaction Advisorv (TA) Costs
Scctor Water Supl (Water & Sanitation)
Projcct Sponsoring Greater Visakhapatnam Smart City Corporation Limited
Authority (GVSCCL
|Location Visakhapatnam, Andhra Pradesh
PPP Mode Envisaged UAMIDBFOT EPC with 0&M/or any other PPP model as
|found suitable
Estimated 'TA Costs Rs. 2,50,16,000/- 1Rs.2.12 Cr+18% GSTI
(incl. of taxes)
|P'ayment Milestone As per IIPDE Scheme
Proposcd
UPDF contribution sought100%
(%)
Current Status RIP for engaging TA is yet to be loated
4 Afer detailed deliberations, it was observed that the PSA has no clarity on the projcct and
private part1ners role in the projct. The Approval Committee decided to defer consideration of theproject proposals for funding of TA costs under IIPDF Scheme and requested the PSA to come up
with clear project contours and scopes on PPP mode.
Enhance energy cfficieney of water supply and wastewater systems for Greater
Visakhapatnam Municipal Corporation (GVMC).
5. The proposal was about enhancing energy elliciency of water supply and wastewater
systems for GVMC. Water supply systems consume significant amounts of energy to pump water
from various sources to the treatment plant, reservoir, across the distribution network and to the
end users. GVMC spends a considerable portion of its budyet towards energy costs.
6 To develop the project, GVSCCL subnited the proposal under lIPDF scheme to hire
transaction advisers. The basic details of the projeet are outlined below.
Project Name Enhance energy eiticienevy of water supply and wastewater
Svstems for Greater Visakhapatnam Municipal Corporation
(GVMC).
Purpose of PPP Transaction Avisory (TA)Costs
Assistance
Sector Water Supply (Water & Sanitation)
Project Sponsoring Greater Visaklhapatnam Smart City Corporation Limited
Authority (GVSCCL
Location Visakhapatnam. Andhra Pradesh
PPP Mode Envisaged IAM/ DBFOT/EPC with OXM/or any other PPP model as
found suitable
Estimated TA Costs Rs. 2,24,20.000/ |Rs. 1.90 Cr 18% GST
(incl. of taxes)
Payment Milestone As per IIPDF Sheme
Proposed
IIPDF contribution 100%
sought (%)
Current Status | RIP lor engaging TA is yet to be lloated
8 GVSCCL was requested to make the prescntation about the proposal. Afier the
presentation, it was observed that ESCO (Energy Saving Companies) model is a well-established
model for the work. the PSA wants to do througlh PPP mode. Afier detailed deliberations, the
Approval Commitlee decided not to accept the proposal.
10. The meeting ended with vote of thanks to the Chair.Annexure-I
List of attendces of the 19 Mecting of the Approval Committee to consider granting approval for
support under the IIPDE Scheme to the proposal of Grcaler Visakhapatnam Smart City
Corporation Limited (GVSCCL), Government of Andhra Pradesh for undedre rtaking water supply
and management system projects in Visakhapatnam on PPP mode, held on 7h March 2024.
1. Department of Eeonomic Affairs, Ministry of Financc
1. Shri Baldeo Purushartha. JS(ISD) in Chair
2. Shri Rahul Singh, Joint Director
3. Ms. Aryaa Balan Kumari, Joint Dircetor
4. Shri Dhruv Rohatgi, OS)
5. Shri Gaurav Jumrani,Consultant
6. NITL Aayog
1. Shri Partha Sarathi Reddy, Adv iser (PPP)
7. Greater Visakhapatnam Smart City Corporation Limited (GVSCCL)
1. Sri M. Vinay Kumar, Superintending Engineer
2. Sri G. Ananda Rao, Manager